User Ratings Explained

August 31st, 2015

Have you ever wondered how user ratings work? Why some users have a green rating while others have a yellow or even a red rating? Below we’re going to outline the foundation of how your payment history affects your rating and what it all means for you, including two sample scenarios at the end.

User ratings range from 0 – 10, and will change color depending on the numerical value. For example, new users start with a 6.0 rating that will show as yellow and users above a 7.0 will show green. User ratings are based entirely on your payment history which determines your community privileges, such as higher money pool limits and the ability to take early seats in a group. Below we’ll outline what exactly causes your rating to increase and decrease.

On Time Payments: The system rewards users who consistently make their payments on time. The more payments, the higher the rating. Users with a perfect 10.0 have a $5,000 money pool limit with unrestricted seating privileges.

Be careful of trying to go too fast. Some users will join too many pools at the same time to quickly grow their rating, but by joining multiple pools they increase their chance of making a budgeting mistake and receiving a late payment, which hurts their rating and will undo all their hard work.

Late Payments: Since everything is automated, it’s actually really hard to get a late payment, but it does happen occasionally. Late payments have a very negative effect on your reputation rating. How much? One late payment can take your score down several points and will sometimes cause your rating to turn ‘red.’ Ouch! In most cases you’ll need make an ADDITIONAL 10 payments to make up for a single late payment.

Once you get over 100 payments the effect of late payments on your rating is slightly reduced. Although we have seen users go from a perfect 10.0 rating to below a 5.0 because they mismanaged their budget during a life crisis.

Why should I maintain a good user rating?

Community: You’re part of the community. Late payments effect the group and prevent everyone from getting their money on time. Imagine you’re counting on your money pool payout for your upcoming vacation and someone in your group is late because they mismanaged their money? Your habits of being a good team-player will be reflected in your user rating.

Economic Benefits: Having a good rating will give you lots of freedom on eMoneyPool. You can throw away your credit card and rely 100% on the service. That means no more high-interest rates and long-term debt. The amount you could save over your life by avoiding credit card debt is staggering. The chart below shows one scenario, imagine the savings over 10 years?.. Or 20 years? The more you protect your rating the more you save by not having to pay high fees elsewhere.

Lets look at a few examples to understand the how a great rating can really change your financial situation.

Example 1: John is a new user and joined two money pools at the same time because he’s saving for a trip to Mexico with his family. However, John went out with his friends over the weekend and overspent a little bit. Unfortunately, he no longer has enough for one of his money pool payments due on Monday and he received a ‘late’ mark against his reputation rating. John immediately catches up the following day by making his past due payment. A few weeks later, he finishes his pools, takes his trip with his family, drinks Pina Coladas on the beach and returns back home. He thinks to himself, “That was easy.” It was the first time he actually saved for a vacation instead of charging it to credit – which he always ends up regretting later. He’s eager to join another money pool to buy a new refrigerator, but when he logs back onto eMoneyPool he notices his rating is in “red” and it’s below his starting point of 6.0. He also notices that he can’t choose any spots except the last positions because his money pool limit was reduced. He didn’t realize it, but his late payment a few weeks ago stained his reputation rating and drastically limited his ability to use the platform.

Solution: John will need to choose a late position in an upcoming pool and complete roughly 10 additional payments on time to undo the damage of that one late payment. His new positive payment history will need to outweigh his negative payment history. Little by little, John notices his rating begins to climb and so does his money pool limit and seating privileges. Hooray!

Example 2: Jennifer has been using eMoneyPool for about a year and has completed two money pools. She has been a great user by making sure that all her payments have been on time, and because of that she has an excellent rating. On Monday morning before her commute to work, Jennifer notices that the front tire on her car is low and takes it to the tire shop to get air. The attendant adds air to her tire, but shows her that her tires are old and need to be replaced asap! Jennifer has a long commute to work every morning and does not want to risk a blow out on the freeway so she needs to take care of this right away. But what are her options? Should she put the tires on credit, pay 29% APR and end up paying a mountain of interest on top of the cost of the tires? Or should she join a money pool and pay a fraction in fees.

Solution: Jennifer joins a money pool and takes the first position, which charges a 6% flat fee. She receives her $1,000 deposit from eMoneyPool and pays for her new tires in cash and even has some left over for other repairs that were needed. She’ll finish making her 10 payments to the pool over the next 5 months which will increase her user rating even higher, increase her money pool limit and will only pay a small fraction of what she would have paid for if she’d used a credit card. Jennifer was rewarded by maintaining her rating in good standing.